Earlier this month, the Park City Board of Education announced that employee salaries would not increase next year and stopped contract negotiations with the union that represents the district’s teachers amid the economic turmoil wrought by COVID-19.

In the three months since the state Legislature’s general session, a planned increase in state funding to the Park City School District of more than $1 million has turned into an expected reduction in the state portion of the district’s revenues of up to 10%, or $3.1 million, according to the district’s business manager, Todd Hauber.

The Board of Education was scheduled to meet Tuesday night, after The Park Record’s press deadline, to discuss how to fill that hole and to ratify a budget for the next school year.

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Options include cutting staff, ending or reducing programs or dipping into reserves.

The Park City Education Association, the union representing teachers, characterized the salary freeze as a pay cut and says the decision was premature, given the Legislature has not finalized education funding for the next school year.

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“We cannot automatically assume the 10% cuts,” said Julie Hooker, co-president of the Park City Education Association. “Let’s just keep meeting, or let’s say let’s wait until after the (special session of the Legislature) and come in right after that and hammer out the details.”

The salary freeze comes as the district and the Park City Education Association have spent months negotiating a new contract to replace the current agreement that expires at the end of June.

Teachers will continue to be compensated at their current level until a new contract is ratified, which would then be back-dated, with any wage adjustments applied retroactively, Hauber said.

One of the district’s revenue streams is actually expected to increase by more than $1 million next year because of a jump in property values in the area. That money was originally planned to be used for a cost-of-living increase for district staff, said board president Andrew Caplan, but now the plan is to use that additional revenue to plug the hole in the budget.

That move would still leave a deficit of around $2 million if the state funding is slashed by 10%. There is little clarity, though, about how much the state will ultimately cut funding. Gov. Gary Herbert called a special session of the Legislature to start Thursday during which lawmakers are expected to finalize school funding.

Hauber said he has been instructed to prepare for cuts of 2%, 5% or 10%.

“So we’re in, really, a ‘what-if’ scenario right now,” he said.

Caplan said the Board of Education ended negotiations because it became clear the district would not be able to offer teachers and staff a raise this year.

Teachers are compensated according to a set schedule that, for decades, meant they got a raise each year. Hauber said that was ostensibly switched in the early 2010s to a merit-based compensation plan in which teachers would receive raises based on their teaching performance. But teachers have received a step increase for many years and the common mindset is that a fourth-year teacher makes more than a third-year teacher.

Hooker said that teachers have come to count on that increase and that it greatly impacts how they plan their financial lives, meaning the freeze feels like a pay cut.

She said the union should have a seat at the table in deciding how cuts are made to the district’s budget as educators would have meaningful input and be directly impacted by the changes. And she said the decisions shouldn’t be made until the financial picture clarifies.

“Sending an email to the entire PC staff saying we have to freeze salaries before we had guidance from the Legislature was premature,” Hooker said. “We want to be part of the solution. When we see where the shortfall is we can roll up our sleeves.”

In addition to finalizing how much districts will receive in funding, the Legislature is also expected to take other actions in the special session that would affect school funding.

For example, Herbert’s office indicated the Legislature would consider allowing school districts to use money to fund day-to-day operations that is normally earmarked for capital projects like building new schools.

Hauber said that would potentially allow the district to access about $19 million in fund balances, but he is wary of using one-time sources of money for ongoing costs. He also noted the district is planning to use the money in the master planning process to overhaul its facilities.

Caplan said the decision to end negotiations came when the board decided it could not increase teacher pay this year.

“Only $11 million (of the budget) is non-compensation related. That includes utilities, that includes gas for buses,” Caplan said. “When you’re taking $3 million off, it basically cuts to the bone anything other than compensation.”

Caplan said the board’s priority is to maintain teacher positions and to avoid other staff layoffs and salary reductions. That will likely mean not rehiring positions that come open naturally, like when someone retires. Another board priority is to avoid increasing class sizes.

He said the board could be forced to cut mental health positions like counselors and administrative staff. He said the only way the board could pay teachers more this year is to raise taxes, which he said the board has ruled out.

“What we’re saying is we cannot give a raise this year,” he said. “We have a strong shared interest … to pay (teachers and staff) as much as we possibly can. We value them. They’re what makes the schools run. We had every intention to pay them more, but you know, unfortunately the state came in and cut our purse strings so we’re in a rough situation.”

When the board and the union hashed out the current contract agreement in 2017, it included an immediate across-the-board $7,000 wage increase for all teachers, and boosted starting teacher compensation to more than $50,000, making Park City teachers the best compensated in the state.

But teachers have not seen a cost-of-living adjustment in the intervening years, Hooker said, and the high cost of living in Summit County puts a financial burden on the workforce.